NBA allows sovereign wealth funds to buy stakes

The National Basketball Association will let sovereign wealth funds, pensions, and endowments acquire passive stakes in its teams, opening up to investors who manage assets that by some estimates exceed $30 trillion.

The NBA s board of governors voted to approve such investments, though any buyer would still be subject to league review and board approval, according to Mike Bass, a spokeswoman for the NBA.

The move extends the NBA's push to get more institutional investors involved in team ownership. In recent years it allowed private equity firms to hold stakes, including setting up a deal in 2020 for Blue Owl Capital Inc.'s Dyal HomeCourt Fund to take minority interests in multiple franchises. It has positions in the Sacramento Kings, Phoenix Suns and Atlanta Hawks.

As of the end of 2021, sovereign wealth funds held around $10.5 trillion, a record high, while public pension funds had $21.4 trillion, according to data from Global SWF. The richest university endowments in the US, which often seek long-term investments, are flush with cash.

Adding passive investments from large funds can increase the pool of potential team owners. The value of NBA franchises has gone up in recent years, making ownership increasingly out of reach for the wealthy and the poorest people.

The average NBA team is worth $2.58 billion, according to Sportico, which previously reported on the league's plans.

Robert Sarver, owner of the Phoenix Suns and Mercury, said in September that he was starting to seek buyers for the NBA and WNBA franchises, amid mounting pressure to step down after an investigation found he used racist slurs and harassed female employees. Sportico believes that the Suns are worth $1.9 billion.

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